Ontario premier defends carbon tax recession claims in wake of criticism [UPDATED]
Ford insists that the federal carbon price will amount to an economic disaster
Exporting & Importing
TORONTO – Premier Doug Ford doubled down Tuesday on his warning that a federal carbon tax will trigger a recession, despite mounting criticism from opponents and economists who called his claim baseless.
His defence via social media came a day after he said a carbon price will be an “economic disaster.”
“The threat of a carbon tax recession is real,” Ford wrote on Twitter. “The cost of goods that are made, farmed + transported in Ontario will go up with a carbon tax. The price will be paid by Ontarians.”
Ford’s initial comments, made during a speech at the Economic Club of Canada on Monday, led many experts to say there is no credible analysis to back up his claims. A number of studies suggest the carbon price will have a small impact on the national economy but will not cause a fiscal slowdown.
The premier, however, stood his ground.
“It’s hard to believe economists with theories that making everything more expensive is a good idea,” Ford tweeted Tuesday.
Ford has been a vocal critic of carbon pricing since he entered provincial politics last year. His Progressive Conservative government scrapped Ontario’s cap-and-trade system after it was elected, calling it a “cash grab” that didn’t help the environment, and has since launched a legal challenge of Ottawa’s carbon pricing plan.
The federal carbon tax, which goes into effect April 1, will impact Ontario, Saskatchewan, Manitoba, and New Brunswick, which have not adopted their own carbon pricing plans.
Dominic Leblanc, federal intergovernmental affairs ministers, said that under Ottawa’s plan, most people in Ontario—eight in 10—will receive rebates from the carbon price.
“It took Doug Ford barely six months to get Ontario’s credit rating downgraded because he cut taxes for his wealthy friends,” Leblanc said in a statement. “He has no plan for the economy and no plan for the environment, and Ontarians are noticing.”
Ontario NDP climate change critic Peter Tabuns said economists are calling out Ford because he is making “stuff up.”
“The only thing threatening to put Ontario into a recession is Doug Ford,” Tabuns said in a statement. “He ripped up legal contracts and meddled in businesses affairs—putting a chill on business, costing Ontario billions, and causing our credit to be downgraded.”
The executive director of Canada’s EcoFiscal Commission, a panel of non-partisan economists, said Canadians need to have a “good faith” conversation about carbon pricing during a federal election year. Ford’s comments aren’t contributing to that, Dale Beugin said.
“Economists have been studying precisely this question and have used really good statistical approaches and data to answer exactly the question that’s being posed there,” he said. “I don’t understand why (Ford) would chose to pick a fight with credible experts.”
In defending Ford’s comments, the premier’s staff in several media reports cited a study from the Conference Board of Canada that said the carbon tax will shrink Canada’s $2.1 trillion gross domestic product by $3 billion.
Robyn Gibbard, one of the study’s authors, challenged the premier’s staff’s assertions in an online post.
“At no point in our research paper do we say that the carbon tax could cause a recession,” he said. “We specifically describe the overall economic impact as ‘small.”’
University of British Columbia economics professor Kevin Milligan said the Ford government need only look west to see a carbon pricing system that has not adversely affected the economy.
“BC has had a carbon price for 10 years and we are leading the country in growth,” he said. “It doesn’t mean the carbon price is causing the growth but what it does mean is we can definitely rule out the case that a carbon price causes a recession.”
Ford said Monday that Ontario does not need a carbon tax to help it reach its emission targets, pointing to his government’s new climate change plan introduced late last year.
Ontario will use taxpayer dollars to spur private investment in clean technologies and create performance standards for large emitters. The province will spend $400 million over four years on a fund called the Ontario Carbon Trust, which aims to entice companies to invest in initiatives that reduce greenhouse gas emissions.